Suppliers to Global Fund back in biz

Two suppliers of mosquito nets to Cambodia found to have bribed officials to gain contracts under the Global Fund’s health grant scheme have had their contracts renewed.

The two firms, Sumitomo Chemical and Vestergaard Frandsen, were found by the fund’s Office of the Inspector General in a years-long investigation to have paid more than $410,000 in bribes to two officials at the National Center for Parasitology, Entomology and Malaria Control.

The two companies spent an additional $20,000 on “gifts” to the officials and their family members.

Following a meeting of the fund’s sanctions panel in early January, it decided to lift the suspension of their contracts this week, despite recognising that their misconduct was “relatively severe” and “that it resulted in reputation harm to the Global Fund”, according to a statement released by the fund yesterday.

In order to have their contracts renewed, Sumitomo and Vestergaard agreed to hire an “independent compliance monitor” to assess future operations, donate one million long-lasting insecticide-treated nets to a grant recipient, and subscribe to and raise support for an industry-wide “anti-bribery pact”.

Until recently, the two firms produced about 80 per cent of all nets supplied by the fund. Since the OIG report was published, another five firms have begun supplying nets, bringing Sumitomo and Vestergaard’s combined contribution to 30 per cent.

Dennis Lim, a spokesman for Sumitomo Chemical, said: “We are committed to continue reinforcing our compliance systems so that such incidents will never happen again.”

Vestergaard Frandsen did not respond to requests for comment yesterday.

Seth Faison, spokesman for the Global Fund, said the agreement was in the best interests of all parties.

“The constructive steps being undertaken contain sufficient remedy, and we believe they trump potential concerns about reputation,” he said in an email.

Preap Kol, executive director of Transparency International Cambodia, said that the decision was largely positive, adding that there should be more careful monitoring of how money is spent in the future.

“I think the renewal of commitment from the Global Fund means the Cambodian people will continue to benefit, which is very important,” he said. “But I would request that the Global Fund have a mechanism in their disbursement of the funds, attached to stricter monitoring and control, to insure future funding will not be misused again.

“At the same time, I ask the ACU [Anti-Corruption Unit] to investigate further … and bring those who committed fraud to justice.”

Sophal Ear, author of Aid Dependence in Cambodia: How Foreign Assistance Undermines Democracy, took a less generous position.

“It’s the kind of caving-in that gives donors a bad name,” he said in an email yesterday.

“The way the Global Fund handled the Good Samaritan’s Dilemma is to say, ‘We’ll hold our noses and keep working.’ Donor amnesia has always been a problem, but I guess it’s hit an all-time high.”